Flashcards in Products Place And Price Deck (6)
Distinguish between the 5 characteristics of services
1. Intangible - main distinguish between goods and services. * can not be seen, touch or smell before purchase, * judgmentis based on attitudes, feeling, perception and experience.
2. Inseparability - simultaneously deliver and consumption of service, distribution roles are integrated, can not exist without a customer.
3. Hetoregeneity- standardization of output is usually difficult. Units differ in price, quality and conformity. People and performance are not consistent.
Ownership - customers only access a service, no ownership transfer fees, payment is for hire or temporary use.
4. Perishability - services are perishable and cannot be stored, services are time dependant, quality lies within the provider
Four objectives of pricing used in order to set the prices of their products
1. Competive pricing
3. Profitability pricing
4. Volume pricing
Explain competitive pricing
This frequently used pricing objective is to match the price ready set by the industry leader. A company focuses its efforts on other ways to attract new customers.
Explain Prestige pricing
-the company may promote, maintain or enhance an image of their product through the use of Prestige pricing which involves pricing the product in a higher price range.
- this is done to limit its availability to the higher end consumer
- this limited availability enhances the products image causing it to be viewed as prestigious.
Explain Profitibility pricing
_ the basic idea is to maximize profit
- the formula for this objective states (Profit = Revenue - Expenses)
- Revenue is determined by a products selling price and the number of units sold.